Culture tax favoured by the Vatican not an alternative

Canonist: The one pillar of church tax will not last much longer

Mainz - Church tax is still flowing in – but the heaviest payers will be retired in ten years at the latest. In an interview with, canon law expert Anna Ott points out alternatives and reform options – and explains why the Vatican's ideal system would not work here.

Published  on 05.03.2024 at 00:01  – by Felix Neumann

Despite rising numbers of people leaving the church, church tax revenues have grown almost almost uninterrupted in recent years - only during the coronavirus crisis was there a slump. However, the church cannot rely on this development not rely on it foreverWhen the baby boomers retire, tax revenues will also fall massively. What can be done? Canon lawyer Anna Ott is an expert on church financing. In an interview with, she argues in favour of preparing for the future in good time and assesses alternatives.

Question: Mrs Ott, according to the latest figures, the Catholic Church alone collected 6.8 billion euros in church taxes per year. In view of such huge sums, isn't any consideration of a reform of church financing rather theoretical?

Ott: It's difficult to overturn the entire system, at least not if you want to end up with a similar amount. And even if you make minor changes, there is always a risk that more will be requested than intended. When church funding is discussed, it is always possible that the whole system will end up being called into question.

Question: Is there any need to reform the church tax at all?

Ott: Yes. Simply because the church tax will soon no longer function in the same way as before in view of the dwindling number of church members. Church funding in Germany is based on the broad support of its members. If these members fall away, the entire financing system will begin to falter. The fact that there is a church tax is guaranteed by the state through the Basic Law, simple laws and court decisions. How it is levied and collected is up to the churches themselves. If the trend of people leaving the church and the demographic development continues, then we already know that the income from the church tax, as it is currently organised, will at some point no longer be able to cover the demand.

Cover by Anna Ott - "Culture tax instead of church tax"
Bild: ©Verlag Herder

Dr Anna Ott is Head of the Canon Law Department at the Bishop's Ordinariate in Mainz and a lecturer in Canon Law at the Catholic University of Applied Sciences in Mainz. The theologian and administrative canonist received her doctorate with a dissertation on German church financing. The work was published at the end of January by Herder-Verlag under the title "Kultursteuer statt Kirchensteuer. German church financing put to the test".

Question: For a long time, the economic development of the church played into the church's hands; income has risen, excluding inflation, with the exception of the coronavirus period. When will a tipping point be reached?

Ott: The big upheaval will come when the baby boomer generation, i.e. those born between 1955 and 1969, retire and therefore pay much less church tax. This generation is currently still making an above-average contribution to church tax revenue: There is still a relatively high level of church loyalty there, salaries are higher at the end of working life and many belong to this group. When this generation has completely retired from working life, this will have a massive impact and income will fall rapidly.

Question: So the churches still have ten years at most to do something?

Ott: Yes. By then, the church must have thought about what it can and wants to do differently. Then the money will definitely be missing.

Question: So far, not much seems to be happening apart from cost-cutting measures. Is this impression misleading?

Ott: Efforts are being made. But often there are simply more pressing issues. Money is an issue that is always on the agenda and is also important. In view of the acute crises facing the church, dealing with a long-term and complicated issue such as church financing is challenging.

Question: The situation is similar on the state side: Reforms in religious constitutional law are complicated and bring few political laurels. It is therefore unlikely that the Basic Law will be amended to give the churches new options. What other options are there?

Ott: One option is to promote fundraising. Above all, this is an opportunity: experience with fundraising shows that targeted donations for specific projects increase identification with a good cause and thus the willingness to donate. However, there are also a few adjustments that could be made to the church tax itself without having to go straight to the constitution.

Question: Namely?

Ott: For example, in the co-determination of the faithful who pay the church tax. How the church manages its income from church tax is completely up to it. It could therefore also involve the grassroots more in what the money is used for. For example, the amount to be paid in church tax could be reduced by the amount of donations to church organisations, i.e. something like a deduction option could be created as with other taxes.

Question: Will Rome go along with this? The fact that in Germany church councils and not the pastors alone decide on finances is a concession that is not actually provided for in universal church law.

Ott: The conflict has existed from the very beginning: The church tax is a state invention. Originally, the bishops did not want it at all, precisely because they feared for their freedom in the face of administrative bodies and co-determination rights prescribed by the state. It was only later that the church realised that the involvement of lay people with their expertise was a sensible way of managing church assets well. In fact, according to the church's understanding, ultimate responsibility must always lie in the hands of the pastor or the bishop - but there is a lot of room for manoeuvre when it comes to the level of involvement.

How church funding works in Europe - an overview

In Germany, church tax is levied by the state, but what is the situation in the rest of Europe? There are differences both in the amount of funding and in how it is used. Public pressure seems to be growing everywhere.

Question: The former ZdK President Thomas Sternberg introduced the proposal into the debate that the church tax should not go to the dioceses as it used to, but to the parishes. Would that be an option?

Ott: It would be possible to move from the diocesan church tax system to a local church tax system, as exists today in Switzerland, for example. If you were to change the system in this way, you would have to consider many things, such as a financial equalisation between parishes with high and low tax revenues, as already exists between dioceses with different financial situations. An interim solution would be a mixed system that combines diocesan and local church tax. This would make sense in order to finance diocesan tasks and categorical, non-parish-based pastoral care, such as in prisons. The fact that such a system change is even possible within the legal framework shows that there are some reform options.

Question: And how do you assess such a system change?

Ott: The principle of subsidiarity naturally speaks in favour of a local church tax: financially strengthening and empowering the grassroots rather than the higher-level structures. One effect of the diocesan church tax system is that the diocesan administrations in Germany are much larger than elsewhere in the world church. This results in a concentration of power and competences at diocesan level over and above the central position that the bishop already has according to the teachings of the Church.

Question: And below this major system change - what would be possible?

Ott: The church tax regulations already stipulate that church taxes can also be waived in full or in part - as far as I know, this is little used and could help to cushion social hardship and also avoid resignations. However, if this option is strengthened, its implementation must of course not be arbitrary, and justice must also be observed here. Clear and transparent rules are needed if we want to make more use of the possibility of a decree.

Question: A major secular criticism of the church tax system is that the state collects taxes for religious communities. In Austria, the church itself is responsible for this. Would that also be conceivable here?

Ott: Legally, that would also be possible in Germany. However, I don't think it would be sensible or practicable for the churches here to take care of the tax themselves: That would mean new, expensive administrative work for collection and, above all, the church would also have to take care of collecting debts itself. Even with the same amount of tax, the churches would end up with much less because collecting it themselves would be so expensive. The current model, in which the state receives money for organising the church tax system, is more attractive for all sides. Even for the state, which has the church pay for the collection of church tax. The only advantages would be greater independence from the state and that employers would no longer have to record the denomination of their employees in their personnel accounting data.

Church tax statistics
Bild: ©FZG/Albert-Ludwig-Universität Freiburg

According to a study sponsored by the two major churches in Germany, the number of church members in the Federal Republic will fall by 49 per cent by 2060. The study was presented in 2019. The projections are now even gloomier.

Question: The clear separation of church and state is not only an argument from a secular perspective. It is also a value from a church perspective. How do you see the German church tax system in the global church from this perspective?

Ott: The church tax only exists in German-speaking countries. How it came about is probably often not known in the global church - or that this model exists at all. When church law was reformed, the German church tax was not even considered, and it was only after interventions from Germany that a provision was included in church law, the "clausula teutonica", which expressly allowed the continued application of "particular laws and customs" in church financing. However, Rome is aware of the weaknesses of the church tax and favours the model of a culture tax, as exists in Italy. The Curia is not particularly enthusiastic about the church tax because it raises many questions and problems regarding the assessment of people leaving the church, which is not provided for within the church. This does not exist in Italy because the culture tax is not dependent on formal membership of a body under secular law, but on the annual decision of the taxpayer. Because in such a system there is no need to declare resignation to a state authority in order to preserve the negative freedom of religion, there is also no discrepancy with the unlosable affiliation to the church through baptism.

Question: The culture tax in Italy is significantly lower than the church tax. In Italy, it is 0.8 per cent of wage tax for all taxpayers, whereas church tax in Germany is 8 to 9 per cent of wage tax for church members only.

Ott: Yes, a culture tax will hardly generate comparable revenue if it is not at least as high as the church tax. And that would be difficult to implement politically because it would be a significant tax increase for all those who do not currently pay church tax. And even if a culture tax were to be introduced in Germany, it would still be far from certain that all Catholics would choose the Catholic Church as the recipient. This was clearly seen in Spain with the introduction of the culture tax, where far fewer voted in favour of the church than expected, and vice versa in Italy, where the very small Waldensian community suddenly collected huge sums in culture tax in relation to its members. Until now, church tax has been linked to voluntary membership of a religious community. With a culture tax, the only freedom left is to determine the recipient - usually every year. This also means that predictability and reliability are lost.

Question: So the culture tax in Germany is not an alternative from a church perspective?

Ott: If you were to design a system in a vacuum, a culture tax would certainly be less conflictual and better accepted than a church tax. But we are not in a vacuum. A culture tax as an alternative to a church tax would have to be made legally possible and politically acceptable - I think that's out of the question.

Question: Almost all of the solutions you have discussed require the involvement of politicians. Whether and when this will happen remains to be seen. What should the church do until then?

Ott: Under no circumstances should the Church sit this issue out. Now that there is still room for manoeuvre, it must define what its core areas are, which it must maintain and finance in order to continue to be a church. Church tasks need to be prioritised. This is painful because making savings always hurts, and it requires a lot of communication and participation to be accepted. Then the church itself must relativise its dependence on church tax: At the moment, there is one main source of income in the form of church tax, which will continue to flow as long as enough people belong to the church. In order to become future-proof, the church must move away from this one-pillar financing and work towards a broad-based financing structure. But above all, the church must get a grip on its trust problem. If the faithful do not trust their church, then that is the central problem that needs to be solved. Large or small reforms to the financing system alone are not enough. If the church wants to secure its funding, it needs believers who identify with it. This is the crucial point in all models of church financing: for church tax, so that people don't leave. For the culture tax, so that people tick the church's box on their tax return. For fundraising, so that people donate to church causes.

by Felix Neumann